Chinese solar manufacturers can't seem to help expanding capacity faster than anyone expects. Maybe it's the cheap money available to Chinese companies, growing demand around the world, or improving margins. No matter how you look at it, China rules our solar universe right now.

Solar leader Yingli Green Energy (NYSE: YGE) continued a strong earnings season for solar on Friday, even though investors did little more than yawn at another earnings surprise. The company keeps pushing more and more panels out, increasing module output 25.2% since the second quarter and planning for 1.7 gigawatts of capacity by the end of next year.

The headline numbers jump out at you, as we've seen with other solar companies. Revenue was up 50% to $490.9 million and earnings per share jumped to $0.44 from $0.12 last year. But with solar, the devil is in the details.

Yingli Green Energy's gross margin was 33.3%, approaching First Solar's (Nasdaq: FSLR) sector- leading 40.3%. The company is still having trouble cutting costs, as non-silicon manufacturing costs were flat from the second quarter at $0.74 per watt. I flagged this as something to watch when Solarfun (Nasdaq: SOLF) reported that the cost per watt actually rose in the third quarter, signaling an end to solar's steep price drop.

Management also echoed bullish sentiments from the rest of the sector for 2011. Yingli Green Energy has 721 megawatts of modules under contract for 2011, with prepayments required from most customers; it expects to have one gigawatt under contract by the end of the year.

Yingli Green Energy stands above some of its competitors because it owns the entire module supply chain, reducing risk and increasing margins. Investors are starting to get worried about 2011, which is what is holding stocks down, and if 2011 is as tough as some suspect, Yingli Green Energy should be able to weather it better than most competitors. No matter what 2011 brings, for better or worse, China has become the epicenter of the solar industry.

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Fool contributor Travis Hoium is long shares of First Solar. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his Motley Fool CAPS picks at TMFFlushDraw.

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